Making the poor pay for rich farmers
Rich countries are subsidising their rich farmers. The total funding comes to $1 billion a day according to the World Trade Organization which wants the developed states to reduce such heavy subsidy.
If only a part of this money could be devoted to feed the poor — the hungry and the starving — the world have been a much happier place.
Developing states have tried to get the subsidy reduced substantially but with only marginal success. Hence the Doha round of tariff cutting negotiations go on and on with the negotiators of the poor countries utterly frustrated.
But in Pakistan it is the poor and the low income groups who are funding the rich farmers as the main burden of supporting the rich farmers falls on the poor. They are being once again made to pay high prices for wheat and flour, far in access of the official procurement price.
The market mechanism makes it justifiable for the rich farmers to say they did not get the full benefit of the procurement price or the soaring market rates. Though the procurement price announced before each harvest applies to every grower who wants to sell his crop, it is the big farmer who really benefits. A small subsistence farmer who produces just enough to eat does not benefit from the support price unless he sells a part of his wheat harvest and buys later from the bazaar at a far higher price.
But it is the big farmer with plenty of trading surplus to sell who gains by bargaining with the government for far higher price. After the big growers sell their surplus, the market mechanism comes in to force, which creates shortages. The market operators benefit by a variety of anti-social practices.
To support the farmers, the government also provides cheap water through construction of barrages and the canal network. This network is being lined to prevent seepage, to reduce inundation and to make more water available for farming.
The government also subsidises sale of urea fertilisers as these are imported at high prices. Power is available at concessional rates for the tube- wells for the farm lords. The big farmers are the beneficiaries of the agricultural research as small farmers cannot benefit by them much. The big farmers are also given large loans for agricultural machinery and many of them default. Then there is the procurement or support price. Compared to a big zamindar, a small farmer fares very badly. Normally he cannot get agricultural loans. The State bank of Pakistan has been trying to rectify the situation but without worthwhile results and some of the borrowers end up tragically as bonded labour.
While the big farmers have their trade bodies to bargain with the government, the peasants have no such protection. They are at the mercy of their feudal lords or tribal chiefs in this heart land of feudalism. Peasant unions ought to be encouraged despite resistance by farm lords. The State Bank ought to assert itself more to provide larger number of loans for smaller farmers. Unless peasants are free, the people cannot be said to be free in spite of the democratic superstructure.
When China began its historic economic reforms, it began with agriculture 20 years ago, it sought food self-sufficiency. It sold its fine rice and imported cheap rice for the masses.
India which leads the campaign for reducing food subsidy by the West, recently announced a $10 billion fund to reduce farmers’ indebtedness as many of indebted persons had committed suicide. It has also proposed agricultural reforms to help the small farmer.
Nawab Yusuf Talpur, a former food minister claimed that if the farmers at the end of the canal can get water, the food problem will be solved. This is a real problem. It is the big farmer who decides how much water the man at the end of the canal gets or whether he gets anything at all. Clearly, we need agricultural reforms to solve our food security problem.
In his first address to the parliament Prime Minister Gilani announced Rs6000 as the minimum salary. Maybe, it is meant to enable the workers to get better wages in order to be able to pay higher prices for their food.
The Punjab government has announced an increase in the price of a 24 kg flour bag to Rs375 . Making the announcement is one thing and enabling the people to get the flour is quite another.